SPECIAL REPORT: Fuel crunch threatens truckers; ‘Perfect storm’ prolongs shortage

TORONTO — A growing number of Ontario trucking carriers are finding it harder to fill up as the fuel supply across the province is deteriorating, says the Ontario Trucking Association.

While it hasn’t yet received reports of truckers having to park power units, “the situation appears to be growing worse day by day” for both highway customers and carriers that own their own bulk storage, OTA says.

Running on Empty: Some truckers haven’t been impacted by the
fuel crunch yet, but the situation could get dire soon: OTA

Truckers are reporting that the worst cardlock shortages are in pockets of Mississauga, as well as North Bay, Sudbury, New Liskeard, and Cochrane; while further disruptions are emerging in the Niagara Peninsula, London, Sault Ste. Marie, and Windsor.

The OTA says bulk customers now running close to empty are being informed that storage tanks may not get topped up for days.

The shortage stems from a fire two weeks ago at Imperial Oil’s Nanticoke, Ont. petroleum refinery. All across Ontario this last week, truckers witnessed up to 30 percent price spikes as Imperial Oil, Canada’s largest refiner, cut gasoline and diesel supplies to its fuel stations.

This weekend, several Petro-Canada and Shell Canada stations also ran dry; and according La Presse, the supply crunch has crossed the Ontario border into Quebec where about 10 Esso stations have been affected.

A “perfect storm” is exacerbating the situation, says Paul Timgren, Ontario sales manager for Quebec-based Ultramar. Not only has the Imperial Oil refinery fire choked supply, but the two-week strike at CN has also made it difficult for all suppliers to import fuel from the U.S. or other parts of Canada.

“There’s still product out there, but there’s not enough, and there’s major transportation problems,” he said in an interview. “There’s only so many (trucking) carriers to go around that are carrying product, so capacity is extremely tight.”

Luckily, Ultramar has made good use of its Maitland, Ont. refinery and is focusing on supporting the cardlock market by hauling product into the Greater Toronto Area.

“Normally, the economics (of trucking fuel from Maitland) don’t work, as we buy from others in the GTA,” he says. “But we need to get product here. So instead of sending a carrier on a one-hour drive to get fuel, he’s now spending 10 hours turnaround time.”

Moves like that by the oil industry have surely helped alleviate some pressure in southern Ontario. An informal survey by TodaysTrucking.com of carriers along the Hwy 401 corridor found only a few that were experiencing minor disruptions. Most felt that they’d be able to function normally provided the shortage doesn’t extend beyond the middle of March, which is when Imperial Oil says its Nanticoke refinery would be gearing up production. CN workers, who returned to work this week under a tentative agreement with the United Transportation Union, should also be running operations at full capacity by then.

To relieve pressure on truckers and suppliers, OTA says
Ottawa should allow highway trucks to fill up with off-road diesel

“We haven’t run into any problems just yet where there’s no fuel available,” says Nick Vandermeer, operations manager of 160-truck Oshawa fleet, International Freight Systems. “But I haven’t seen where we are with the (price) increases and where we need to go with the fuel surcharges.”

Since almost all his truck lanes are north-south, Harold Heffernan of Kitchener-based Celadon Canada, says he preemptively ordered his drivers to fill up in the U.S. a day after hearing about the refinery fire.

“Our people are filling up just before crossing the border into Canada and hopefully they’ll have enough to go back on their return trip. Consequently, it hasn’t caused us any real difficulty as of yet,” he told TodaysTrucking.com. “Although if it continues for another four weeks than, say, two weeks, I think the problems will have much more impact.”

OTA President David Bradley is warning truckers not to be too complacent, however. “We have not seen the worst of it yet.”

“Some are feeling the impact of the fuel shortage sooner than others, but all are worried that if this goes on for much longer the situation could get desperate,” says Bradley, adding that many trucking companies report that they cannot find relief from other fuel suppliers.

Ultramar’s Timgren admits his phone has been ringing with carriers looking for alternate bulk supply. He says Ultramar has been able to top up fleets that do at least some business with the company, but it isn’t in a position to satisfy non-customers. “We’re doing what we can,” he says.

Meanwhile, OTA is continuing to press Environment Canada to allow off-road diesel (above 500 ppm sulfur) to be temporarily sold to the on-highway market until disruptions cease. The association appealed to the government last week, but there’s still been no word from Ottawa.

“This would provide relief in the short-term,” says Bradley. “It is our understanding that the government is wading through the legalities, but for now we are hamstrung.”

Bradley said the association is planning on setting up a make-shift fuel matching service on its website (ontruck.org) where members who have sufficient supply of diesel fuel could sell it to a member company that is short.

Have your say

This is a moderated forum. Comments will no longer be published unless they are accompanied by a first and last name and a verifiable email address. (Today's Trucking will not publish or share the email address.) Profane language and content deemed to be libelous, racist, or threatening in nature will not be published under any circumstances.